Correlation Between Hanesbrands and Moodys
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Moodys at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hanesbrands and Moodys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Moodys, you can compare the effects of market volatilities on Hanesbrands and Moodys and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hanesbrands with a short position of Moodys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Moodys.
Diversification Opportunities for Hanesbrands and Moodys
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanesbrands and Moodys is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moodys and Hanesbrands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hanesbrands are associated (or correlated) with Moodys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moodys has no effect on the direction of Hanesbrands i.e., Hanesbrands and Moodys go up and down completely randomly.
Pair Corralation between Hanesbrands and Moodys
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.24 times more return on investment than Moodys. However, Hanesbrands is 2.24 times more volatile than Moodys. It trades about 0.13 of its potential returns per unit of risk. Moodys is currently generating about 0.12 per unit of risk. If you would invest 530.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 340.00 from holding Hanesbrands or generate 64.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Hanesbrands vs. Moodys
Performance |
| Timeline |
| Hanesbrands |
| Moodys |
Hanesbrands and Moodys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Moodys
The main advantage of trading using opposite Hanesbrands and Moodys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Moodys can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Moodys will offset losses from the drop in Moodys' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Moodys vs. RELIANCE STEEL AL | Moodys vs. ALGOMA STEEL GROUP | Moodys vs. Reliance Steel Aluminum | Moodys vs. Magnachip Semiconductor |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |